Social Media Virtual Currencies, Facebook Credits and the Internet | Bitcoin Magazine

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As little as five years ago, virtual currencies only had a very niche role in the internet ecosystem. You might see one used to maintain the internal economy of a massively multiplayer online game, but that was just about it. There was simply no need for them, as video game purchases cost more than $40 and were generally done in retail stores. The other form of monetization was subscriptions, and these cost more than $10 per payment, an amount high enough that the transaction fees involved in transferring money through credit cards were bearable.

Then, however, something happened. As the smartphone revolution took over the digital world, a new market for casual games appeared, games which are made by independent developers making a few hundred thousand dollars at most and close to nothing on average and which rely on quantity to earn their largest gains – one of the most popular titles so far, Angry Birds, sells its different versions for $1-$2. The same happened in social media, releasing a completely new class of games based on playing them with your friends and relying on a different model to generate their income: micropayments.

However, there is a problem: the credit card fees…

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